Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression
The authors apply vector autoregression to firm-level panel data from 36 countries to study the dynamic relationship between firms' financial conditions and investment. They argue that by using orthogonalized impulse-response functions they ar...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2002/10/2040839/financial-development-dynamic-investment-behavior-evidence-panel-vector-autoregression http://hdl.handle.net/10986/19216 |
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okr-10986-192162021-04-23T14:03:42Z Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression Love, Inessa Zicchino, Lea ACCOUNTING ADVERSE SELECTION ASYMMETRIC INFORMATION AUTOREGRESSION BALANCE SHEETS BUSINESS CYCLES CAPITAL ALLOCATION CAPITAL MARKETS CD CREDIT MARKETS DEBT DIMINISHING RETURNS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC STATISTICS ECONOMICS ECONOMISTS EXTERNAL FINANCING FINANCIAL FACTORS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL INTERMEDIATION FINANCIAL MARKETS FIXED ASSETS GDP HUMAN CAPITAL INNOVATIONS LESS DEVELOPED COUNTRIES LIQUIDITY M3 MARGINAL PRODUCT MARGINAL PRODUCTIVITY MORAL HAZARD NET WORTH NPV POLITICAL ECONOMY PRESENT VALUE PROFITABILITY PROGRAMS REAL INTEREST RATE STOCK MARKETS TIME SERIES FINANCIAL DEVELOPMENT INVESTMENT BEHAVIOR VECTOR AUTOREGRESSION FINANCIAL SYSTEMS COLLATERAL DECISION MAKING BUSINESS CYCLES ADVERSE SELECTION MORAL HAZARD ALLOCATION OF RESOURCES CASH FLOW FINANCIAL INTERMEDIARIES TIME SERIES FINANCIAL DEVELOPMENT The authors apply vector autoregression to firm-level panel data from 36 countries to study the dynamic relationship between firms' financial conditions and investment. They argue that by using orthogonalized impulse-response functions they are able to separate the "fundamental factors" (such as marginal profitability of investment) from the "financial factors" (such as availability of internal finance) that influence the level of investment. The authors find that the impact of the financial factors on investment, which they interpret as evidence of financing constraints, is significantly larger in countries with less developed financial systems. The finding emphasizes the role of financial development in improving capital allocation and growth. 2014-08-01T19:16:03Z 2014-08-01T19:16:03Z 2002-10 http://documents.worldbank.org/curated/en/2002/10/2040839/financial-development-dynamic-investment-behavior-evidence-panel-vector-autoregression http://hdl.handle.net/10986/19216 English en_US Policy Research Working Paper;No. 2913 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ADVERSE SELECTION ASYMMETRIC INFORMATION AUTOREGRESSION BALANCE SHEETS BUSINESS CYCLES CAPITAL ALLOCATION CAPITAL MARKETS CD CREDIT MARKETS DEBT DIMINISHING RETURNS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC STATISTICS ECONOMICS ECONOMISTS EXTERNAL FINANCING FINANCIAL FACTORS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL INTERMEDIATION FINANCIAL MARKETS FIXED ASSETS GDP HUMAN CAPITAL INNOVATIONS LESS DEVELOPED COUNTRIES LIQUIDITY M3 MARGINAL PRODUCT MARGINAL PRODUCTIVITY MORAL HAZARD NET WORTH NPV POLITICAL ECONOMY PRESENT VALUE PROFITABILITY PROGRAMS REAL INTEREST RATE STOCK MARKETS TIME SERIES FINANCIAL DEVELOPMENT INVESTMENT BEHAVIOR VECTOR AUTOREGRESSION FINANCIAL SYSTEMS COLLATERAL DECISION MAKING BUSINESS CYCLES ADVERSE SELECTION MORAL HAZARD ALLOCATION OF RESOURCES CASH FLOW FINANCIAL INTERMEDIARIES TIME SERIES FINANCIAL DEVELOPMENT |
| spellingShingle |
ACCOUNTING ADVERSE SELECTION ASYMMETRIC INFORMATION AUTOREGRESSION BALANCE SHEETS BUSINESS CYCLES CAPITAL ALLOCATION CAPITAL MARKETS CD CREDIT MARKETS DEBT DIMINISHING RETURNS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC STATISTICS ECONOMICS ECONOMISTS EXTERNAL FINANCING FINANCIAL FACTORS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL INTERMEDIATION FINANCIAL MARKETS FIXED ASSETS GDP HUMAN CAPITAL INNOVATIONS LESS DEVELOPED COUNTRIES LIQUIDITY M3 MARGINAL PRODUCT MARGINAL PRODUCTIVITY MORAL HAZARD NET WORTH NPV POLITICAL ECONOMY PRESENT VALUE PROFITABILITY PROGRAMS REAL INTEREST RATE STOCK MARKETS TIME SERIES FINANCIAL DEVELOPMENT INVESTMENT BEHAVIOR VECTOR AUTOREGRESSION FINANCIAL SYSTEMS COLLATERAL DECISION MAKING BUSINESS CYCLES ADVERSE SELECTION MORAL HAZARD ALLOCATION OF RESOURCES CASH FLOW FINANCIAL INTERMEDIARIES TIME SERIES FINANCIAL DEVELOPMENT Love, Inessa Zicchino, Lea Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression |
| relation |
Policy Research Working Paper;No. 2913 |
| description |
The authors apply vector autoregression
to firm-level panel data from 36 countries to study the
dynamic relationship between firms' financial
conditions and investment. They argue that by using
orthogonalized impulse-response functions they are able to
separate the "fundamental factors" (such as
marginal profitability of investment) from the
"financial factors" (such as availability of
internal finance) that influence the level of investment.
The authors find that the impact of the financial factors on
investment, which they interpret as evidence of financing
constraints, is significantly larger in countries with less
developed financial systems. The finding emphasizes the role
of financial development in improving capital allocation and growth. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Love, Inessa Zicchino, Lea |
| author_facet |
Love, Inessa Zicchino, Lea |
| author_sort |
Love, Inessa |
| title |
Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression |
| title_short |
Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression |
| title_full |
Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression |
| title_fullStr |
Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression |
| title_full_unstemmed |
Financial Development and Dynamic Investment Behavior : Evidence from Panel Vector Autoregression |
| title_sort |
financial development and dynamic investment behavior : evidence from panel vector autoregression |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2002/10/2040839/financial-development-dynamic-investment-behavior-evidence-panel-vector-autoregression http://hdl.handle.net/10986/19216 |
| _version_ |
1764439446260809728 |